Critical Review: Laredo Petroleum (LPI) vs. ConocoPhillips (COP)
Laredo Petroleum (NYSE: LPI) and ConocoPhillips (NYSE:COP) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.
ConocoPhillips pays an annual dividend of $1.14 per share and has a dividend yield of 2.1%. Laredo Petroleum does not pay a dividend. ConocoPhillips pays out -81.4% of its earnings in the form of a dividend.
This table compares Laredo Petroleum and ConocoPhillips’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and target prices for Laredo Petroleum and ConocoPhillips, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Laredo Petroleum currently has a consensus price target of $12.97, indicating a potential upside of 55.10%. ConocoPhillips has a consensus price target of $58.60, indicating a potential upside of 7.22%. Given Laredo Petroleum’s higher probable upside, equities research analysts plainly believe Laredo Petroleum is more favorable than ConocoPhillips.
Institutional and Insider Ownership
70.9% of ConocoPhillips shares are owned by institutional investors. 1.4% of Laredo Petroleum shares are owned by insiders. Comparatively, 0.8% of ConocoPhillips shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Laredo Petroleum and ConocoPhillips’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Laredo Petroleum||$822.16 million||2.47||-$260.73 million||$2.28||3.67|
|ConocoPhillips||$32.58 billion||1.97||-$855.00 million||($1.40)||-39.04|
Laredo Petroleum has higher earnings, but lower revenue than ConocoPhillips. ConocoPhillips is trading at a lower price-to-earnings ratio than Laredo Petroleum, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Laredo Petroleum has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, ConocoPhillips has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.
Laredo Petroleum beats ConocoPhillips on 9 of the 16 factors compared between the two stocks.
Laredo Petroleum Company Profile
Laredo Petroleum, Inc. (Laredo) is an independent energy company. The Company is focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. It operates through two segments: Exploration and production of oil and natural gas properties, and Midstream and marketing. The exploration and production of oil and natural gas properties are conducted by it through the exploration and development of its acreage in the Permian Basin. As of December 31, 2016, it had assembled 127,847 net acres in the Permian Basin and had total proved reserves, presented on a three-stream basis, of 167,100 thousand of barrels of oil equivalent (MBOE). The Midstream and marketing segment’s operations are conducted by its subsidiary, Laredo Midstream Services, LLC, which buys, sells, gathers and transports oil, natural gas and water primarily for the account of Laredo.
ConocoPhillips Company Profile
ConocoPhillips is an independent exploration and production company. The Company explores for, produces, transports and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG) and natural gas liquids. The Company operates through five segments: Alaska, Lower 48, Canada, Europe and North Africa, Asia Pacific and Middle East, and Other International. The Alaska segment explores for, produces, transports and markets crude oil, natural gas liquids, natural gas and LNG. The Lower 48 segment consists of operations located in the United States Lower 48 states and the Gulf of Mexico. Its Canadian operations consists of oil sands developments in the Athabasca Region of northeastern Alberta. The Europe and North Africa segment consists of operations and exploration activities in Norway, the United Kingdom and Libya. The Asia Pacific and Middle East segment has exploration and production operations in China, Indonesia, Malaysia and Australia.
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